Budget Accompanying Act 2027–2028: Highlights

On 10 June 2026, the government presented the draft Budget Accompanying Act 2027–2028 (“BBG 2027–2028”), which bundles a wide range of tax and procedural measures to support the double budget for 2027 and 2028. Below is an overview of key tax-related highlights.

Income tax 

Abolition of teleworking allowance and home office allowance

The large and small workplace allowance (“Arbeitsplatzpauschale”) shall be abolished for financial years beginning after 31 December 2026. However, the general possibility of deducting expenses for a study located within the home (“Arbeitszimmer im Wohnungsverband”) shall remain in place, as well as the deduction of expenses for ergonomically suitable furniture for a workplace outside a dedicated study (up to EUR 300 per calendar year).

In addition, the teleworking allowance (“Telearbeitspauschale”), which previously amounted up to EUR 3 per teleworking day, shall be abolished as of the 2027 calendar year.

Investment-related profit allowance

In addition to the basic allowance (up to EUR 4,950), an investment-related profit allowance (“investitionsbedingter Gewinnfreibetrag”) has so far been available from a profit base of EUR 33,000, provided it was covered by acquisition or production costs of qualifying assets. For financial years beginning after 31 December 2026 and before 1 January 2030, the scope of eligible assets shall be limited to real investments. As a result, all types of securities shall no longer qualify for the investment-related profit allowance. However, replacement investments for previously qualifying securities shall remain permissible during the transitional period. For financial years beginning after 31 December 2029, investment in securities shall again become eligible.

Sale of real estate constituting „old assets“

In the case of the sale of real estate classified as “old assets” for tax purposes (i.e. no longer subject to taxation as of 31 March 2012), the calculation of capital gains shall be based on lump-sum acquisition costs (previously: 86% in the standard case / 40% in the reclassification case). In order to reflect the increase in property values since the introduction of the revised real estate taxation regime in 2012, these rates shall be reduced from 40% to 30% (reclassification case) and from 86% to 80% (standard case). These changes shall apply to sales after 31 December 2026, whereby the relevant factor shall be the contractual obligation rather than the receipt of income.

Allocation of the Family Bonus Plus

Under current law, the Family Bonus Plus (“Familienbonus Plus”) may be divided between the person entitled to family allowance and their spouse/partner, or the taxpayer entitled to the child maintenance deduction, either equally (50:50) or in full to one person. The amended version introduces a differentiated allocation system: if a child – or another child living in the same household – has not yet reached the age of four, the existing allocation options (50:50 or 100%) remain available. If the child has reached the age of four and there is no other child in the household under the age of four, an additional allocation option of 75:25 will be introduced. The Family Bonus Plus may be allocated entirely to one parent only if there is no second eligible person. These changes shall apply for the first time to assessments for the 2027 calendar year.

Suspension of Indexation of the Child Tax Credit

The Budget Accompanying Act 2025 had already suspended the indexation of the child tax credit (“Kinderabsetzbetrag”) for the calendar years 2026 and 2027. As part of budget consolidation measures, this suspension shall now also be extended to the 2028 calendar year.

Payroll taxes

The maximum social security contribution base will be exceptionally increased to EUR 7,080 in 2027 and EUR 7,130 in 2028.

From 2028, the employer’s payroll contribution (“Dienstgeberbeitrag”) will be reduced from 3.7% to 2.7%, while the current exemption for employees over 60 will be abolished.

A taxable benefit-in-kind for electric company cars will be introduced: from 2027, 0.375% of actual acquisition costs (max. EUR 180/month), rising to 0.625% (max. EUR 300/month) in 2028.

The reduced unemployment insurance rates for low incomes will be abolished; from 2027 a uniform 2.95% rate will apply, with transitional rules for existing employment relationships.

Corporate income tax

Shareholder current accounts

New rules will apply to shareholder current accounts: receivables due from individuals who are direct or indirect shareholders of the company must be settled or converted into arm’s‑length, documented and interest‑bearing loans (including credit checks and collateral) by the balance sheet date. Otherwise, the outstanding amount will be deemed a dividend paid on the day after the balance sheet date and subject to withholding tax. A de minimis threshold of EUR 50,000 applies for shareholders with at least 10% shareholdings; the rules apply to financial years ending in 2027 and later.

Progressive corporate tax rate

For financial years beginning after 31 December 2027, a progressive corporate tax rate will be introduced for (fully and limited) taxable corporations of the first category: 23% up to EUR 1 million of taxable income and 24% on the excess. The same progressive scale will apply at the level of group parents (Gruppenträger) in tax groups; the group parent’s financial year is decisive in such cases.

The final withholding effect of real estate withholding tax, capital gains withholding tax and § 99 EStG withholding tax for specific corporations  will be limited: if such income was taxed at 23% at source but the progressive rate results in a higher burden, a corporate tax assessment will be required.

The withholding tax on payments for pipeline and similar rights will rise from 7.5% to 7.75% for payments after 31 December 2027.

Corporate tax prepayments

Prepayments for 2028 (or 2029 for non‑calendar year entities) will be increased by 4.5% where the underlying corporate tax liability exceeded EUR 1 million in a pre‑2028 year.

VAT and excise taxes 

VAT

From 1 January 2027, the tax authorities may exclude taxpayers suspected of custom‑related tax offences from using the deferred import VAT mechanism for up to two years.

Austrian motor vehicle tax (“Normverbrauchsabgabe“)

For vehicles with only an NEDC (New European Driving Cycle) CO2 value, this value may be multiplied by 1.27 for calculating the Austrian motor vehicle tax. To avoid hardship, the tax burden for used cars imported and newly registered in Austria by displaced persons from Ukraine will be aligned with comparable domestic vehicles.

Package Tax Act

The draft of the Package Tax Act (“PakStG”) is identical in substance to the ministerial draft. A new package tax will apply from 1 October 2026 to domestic delivery of parcels in distance sales where the supplier’s Austrian distance sales exceeded EUR 100 million in the previous year. The tax will be EUR 2 per parcel or, at the taxpayer’s option, EUR 2 per order.

Alcohol Excise Tax

The alcohol excise rate will increase by 30% to EUR 1,560 per 100 litres of pure alcohol from 1 January 2027.

Emission trading law

The national emissions trading law will reintroduce relief for agricultural diesel for 2026 and 2027 and clarify the expected transition of the national CO2 pricing system into the EU ETS II around 2028.

Stability Contribution (Bank Levy)

The currently applicable rate of the Stability Contribution shall continue to apply until and including the 2029 calendar year. Thereafter, both the tax rate and the reasonableness and burden thresholds set out in Section 4 shall be reduced to the levels that applied prior to the enactment of the 2025 Budget Consolidation Measures Act.

In addition, the special payment introduced for the years 2025 and 2026 shall be extended through the 2028 calendar year. Thereafter, the special payment shall be reduced by approximately two-thirds in 2029 and shall be abolished entirely as of the 2030 calendar year.

Valuation Act

With regards to the determination of the fair market value of securities and shareholdings, it is proposed that, under certain conditions, the fair market value may also be derived from a single sale transaction. This requirement should be deemed fulfilled in particular where the disposed capital interest is comparable in terms of size and rights, or where comparability can be ensured through appropriate premiums or discounts. Furthermore, it shall be possible to derive the fair market value from a sale occurring at a later point in time, which may be treated as a retroactive event within the meaning of Section 295a of the Austrian Federal Fiscal Code (BAO).

The background to this amendment is that, under existing case law, deriving the fair market value from only a single sale transaction was considered insufficient. Consequently, in practice, the value is generally estimated by considering the company's total assets and earnings prospects, typically using the simplified “Wiener Verfahren”, which, according to the explanatory notes, frequently results in valuation discrepancies or undervaluation of shareholdings.

The new provision shall apply to valuation events occurring after 10 June 2026.

Procedural law and anti‑abuse 

Engagement of Dummy Companies: Expansion of Liability to Cover Social Security Contributions, Wage Tax and VAT

The liability provisions relating to the engagement of dummy companies (“Scheinunternehmen”) under Section 9 of the Austrian Anti-Social Fraud Act (“Sozialbetrugsbekämpfungsgesetz – SBBG”) are to be significantly expanded. Whereas liability has previously been limited to remuneration claims of employees engaged by the dummy company or by companies commissioned by the dummy company, it will in future additionally cover the following liabilities and taxes:

• social security contributions and levies payable to Austrian health insurance institutions;
• wage tax (Lohnsteuer) relating to work performed by employees of the sham company in connection with the engagement; and
• value-added tax (VAT) arising from the contract.

These expanded liability provisions will be in addition to existing liability regimes, such as the rules governing the liability of a general contractor for wage-related taxes and social security contributions of subcontractors in connection with the provision of construction services (Section 82a of the Austrian Income Tax Act (EStG) and Section 67a of the Austrian General Social Insurance Act (ASVG)).

Liability for social security contributions and levies is to be enforced by the competent health insurance institution through civil proceedings. By contrast, liability for wage tax and VAT is to be asserted by the tax authorities by way of a formal liability assessment notice (“Haftungsbescheid”).

The amendments will enter into force on 1 January 2027.

Conclusion 

The Budget Accompanying Act 2027–2028 bundles a range of fiscal consolidation measures and structural reforms that will affect both personal income taxation and corporate taxation. Businesses and individuals alike should analyze the proposed changes at an early stage in order to assess the tax implications and take account of any transitional periods in a timely manner. As always, the final enactment of the legislation remains subject to the completion of the legislative process.